: the government creeps closer tothefiscalcliffwithorders for the military and others to start preparing for the worst. this is "special report." ♪ ♪ >> bret: good evening. i'm bret baier. the country plays the waiting game to see if country and the president take the economy off the fiscal cliff, president obama says he will not play the debt ceiling game again. but he is taking a few more shots in the public relations game. turning the screws on republicans, a little bit more. chief white house correspondent ed henry starts us off tonight. >> reporter: finally the blame for stalled budget talks on republicans, president ratcheted up the lesh on john boehner. >> no one wants to have this done more than me. >> reporter: telling agencies to watch for massive spending cuts from going over the fiscal cliff and warped the business exectives the economy could take another hit if the republicans decide to extend the middle class tax cut to avoid the cliff for now. then come back with more leverage. to tie it to a hike in the debt ceiling. >> we are 23409 going play that game next year. if

-calledfiscalcliffiftaxes are not raised. >> the administration prepared to go overthefiscalcliff? >>absolutely. there is no prospects in agreement that doesn't involve the raise going up on the top 2 percent. >> house speaker bane another a boehner and president obama have been talking by phone. not much progress was made. boehner says if he doesn't agree with the propose sal he has obligation to submit one of his own. >> the missing girl battling leukemia is safe and is being treated in new mexico. she was taken out of a hospital in phoenix. her mother took her. doctors are worried she could potentially get a deadly infection. the girl's father claims the hospital was to blame for a different infection which cost emily her right arm. he's refusing to tell police where she is in mexico. both parents could face criminal charges. >> shock, disgust and fear spread quickly on the campus of the university of -- one details the exact moment they realty lied they were in a major crisis. it reads subject emergency the shooter at the aurora mall last night was james holmes i am worried a

developments out of the region, but first tonight, urgent developments onthefiscalcliffshowdown. tim guy ne geithner announced of of the white house that we would, quote, absolutely go over the fiscal cliff which would trigger tax cuts and spending increases unless taxes increase on the top two percent of wage earnings. >> i want you you to understand when it comes to raising taxes on the wealthy. if republicans do not agree to that, is the administration prepared to go over the fiscal cliff? >> oh, absolutely. there's no prospect to an agreement that doesn't involve those rates going up on the top 2% of the wealthy. >> all right. it appears the very definition of the american dream is now being rewritten by president barack obama. now, today our commander-in-chief publicly said he's not going to play games with the fiscal cliff, but that is just not reality. right now the president is playing a very dangerous game of chicken and this is with your paycheck and the american dream. meanwhile, the republicans have allowed themselves to get caught in a circular firing squad. they're negotiat

2012. i am gretchen carlson. hold the phone. president and speaker holdafiscalcliffcall.there is a problem, the white house doesn't want to budge. >> we face no agreement that doesn't involve the rates going up on the top two percent. >> gretchen: so is it really progress or a stand still. >> steve: meanwhile the reverend behind this nativity scene. live pictures and he has a message from the federal government. merry christmas, government. you are not the real savior. the reverend joins us live this christmas season. >> brian: super storm sandy couldn't wipe out his home but something else did. >> she said to me. are you sure your house is gone. you misplace a pen and pencil but not a house. >> gretchen: how the entire house vanished."fox and friendst now. ♪ ♪ "fox and friends". >> steve: a house is something that is not easy to misplace. if you leave it there, you come back and it is there. >> gretchen: you hope that happens. we'll fill you in on the details. in the meantime what happen in a phone call. a lot can happen, right. you can get in fights and agreements

nothing new with no details. it is a republican compromise solution to theimpendingfiscalcliff. spendingcut and tax increases that both sides mean would mean recession. after what both sides called a frustrating weekend. today's development don't appear to break a log jam. not yet. ed henry begins our coverage. >> reporter: good evening. they are saying the plan is ridiculous, so much so they will not offer counterproposal to the g.o.p. counterproposal and say tonight unless speaker boehner gives in on raising taxes on the rich, the president is ready to go off the cliff. >> right now i'd say we are nowhere, period. nowhere. >> john boehner declaring a stalemate in an exclusive with fox, as republicans teed off on president obama first offer that included new spending plus 1.6 trillion in tax hikes. totally unacceptable. >> i think we are going over the cliff. it's clear to me they made political calculation. white house officials insisted disaster could be amended and demanded a counter offer on the table. >> what we hope for is specificity from the republicans. >> an hour la

go overthefiscalcliffandwe'll see what happens. >> reporter: at the last minute i think there will be a deal. i think republicans will retreat and say okay, you can have higher tax rates but only on people making a half million dollars a year. the president will say, okay, but we'll only discuss -- we'll think about, we'll promise spending cuts in the future. it will be a way of kicking the can down the road. martha: charles krauthammer have a will the more leverage than republicans realize. the president does not want us to go into a recession. we'll talk about that coming up. bill: democrats are all about tax hike and republicans argue massive spending programs like medicare and social security must be dealt with in any kind of deal if you want to bring count deficit today. south carolina senator republican lindsey graham on that right now. >> social security and medicare are $50 trillion under funded combined. we need to adjust the age of retirement slowly but surely for people independent 55. because we are all living longer, you and i need to pay a little more becau

tonight inthefiscalcliffnegotiations.republicans are pushing back hard. against president obama and the democrats over what will be in whatever deal they craft to avoid the implementation of the automatic spending cuths and tax increases. chief white house correspondent ed henry is live with details. good evening, ed. >> tonight we have new details of exactly what treasury secretary geithner laid out to republicans in the big meeting earlier today is. the republican aides tell mike emanuel there was a lot of detail about the new tax increases. $1.6 trillion in new tax increases from the new rate, capital gain, dividends as well. new spending, starting with $50 billion next year. the white house is countering that is leftover stuff from the president american jobs act. not really spending. nonetheless, the republican aides on the hill saying this is a nonstarter to them. white house aide i just spoke to said that this is not new. this is the president's original budget framework going to september of 2011. they say inside the white house tonight the real problem is the republican

to hammer out a deal over tax hikes and spending cuts as the clock particulars towardsthatfiscalcliffdeadlineon january 11. mike emanuel is live. we are still getting hard lines from either side about where they stand on this. what is really happening behind the closed doors? are they closer to a dole? >> reporter: jenna you're right about a lot of tough talk in public, but behind closed doors we know the president, the speaker of the house john boehner had a phone call late yesterday, the first call they had in a week. there has not been much in the way of leaks as to what was discussed. most folks on capitol hill may suggest that no leaks means they are getting down to serious movement on finding a compromise to avert the fiscal cliff. because in public the treasury secretary was asked yesterday if the administration is prepared to go over the fiscal cliff. check this out. >> is the administration prepared to go over the fiscal cliff. >> absolutely. we see no prospects for an agreement that doesn't involve those rates going up on the top 2% of the wealthist. remember it's only 2%.

back in place. it depends on how much you think going overthefiscalcliffwillaffect the economy. others say it will be devastating and others say it will be back. it depends on where you stand when you are making these sort of analyses. megyn: it feels like we are left with the economy -- with people's livelihoods and growth in the country and salaries and unemployment benefits. we are just left. both sides are accusing the other of being the untethered risk taker. last night speaker boehner made remarks demanding leadership on the president. here he is. >> this is not a game. jobs are on the line. the american economy is on the line. this is a moment for adults leadership. megyn: is there a political risk to the president? is there a political risk to him in looking a little too bashful little too smart, as they say, when it comes to this game? >> sure, there are political risks all around for both sides. he saw the president today. he has been doing this and will be doing more of it. trying to clean outside game and put pressure on and make the public put pressure on members o

irrespective ofanyfiscalclifftalk.this is all thanks to obamacare? >> yeah, that's exactly right, megyn. there was a surtax in the health care law, supposedly to pay for medicare, but they raised it -- they raided the money out of medicare before it even arrived to pay for the new obamacare spending. it's 0.9% additional medicare tax on wages of high income earners, and it is 3.8% on all unearned income, so capital gains, dividends, rental income, interest, any other unearned income has this new 3.8% surtax, and that's on top of whatever might happen in these fiscal cliff talks. megyn: so that is happening. if you make $200,000 as an individual or 250 as a family, it's happening as of january 1. >> well, looks that way. my parsing of speaker boehner's offer in the fiscal cliff talks is that this is going to happen no matter what. they talked about holding the line -- megyn: no, wait, wait, wait, let me interrupt because i just don't want to confuse the two, because all the taxes are confusing. i'm saying this surtax, this .9 income tax surtax, and then this 3.8% surtax on nearly all cap

administration is absolutely ready to go overthefiscalcliff. >>what we got today was a assemble nar on hoaseminar on h. >> the vast majority of the media is on his side. no matter what he says, no matter what he does, even though what he's doing is outrageous, but his own party won't support him. >> the republicans have conceded the language. >> we could probably solve this in about a week. it's not that tough. >> it was week. >> president obama has said that he has pen in hand and he's prepared to sign the middle income tax cuts. >> you have a president of the united states that has the mighty pen. you bailed out the banks. bail out the american people that don't have homes for the holidays. >> in his second term i hope he will offer fresh ideas and serious leadership. >> we need a response from the white house. >> i'm hea here to tell you that nobody wants to get this done more than me. >> it's true that president obama won reelection and i congratulate him on his victory, but on january 20th, he'll face a stagnant economy and a fiscal mess. >> our people in an overwhelming way su

's court." and while everyone is focused on theso-calledfiscalcliff, wehave reports that president obama has been working on a climate plan, and lou dobbs helps us look at how widely this likely this is and whether there are alternatives after the break. >> this is why more than anything else obama needs to be defeated and these people need t to be thrown out of office [ male announcer ] truth is, dayquil doesn't work on runny noses. what? [ male announcer ] it doesn't have an antihistamine. really? [ male announcer ] really. alka-seltzer plus cold and cough fights your worst cold symptoms, plus has a fast acting antihistamine to relieve your runny nose. [ sighs ] thank you! [ male announcer ] you're welcome. that's the cold truth! [ male announcer ] alka-seltzer plus. ♪ oh what a relief it is! ♪ [ male announcer ] can't find theraflu? try alka-seltzer plus for fast, liquid, cold, and flu relief. megyn: as washington fights over taxes and spending, it dominates the headlines and we are getting a report on the potential climate deal that could have an impact on our economy. talk

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